Q1 2025 Rubrik Inc Earnings Call

June 11, 2024

At this time all participants are in a listen only mode.

Operator: Results conference call. At this time, all participants are in a listen-only mode. Later, there will be an opportunity for a question-and-answer session. If you would like to register to ask a question, please press the Star and one on your telephone keypad, and you may withdraw yourself from the queue at any time by pressing Star two. Please note today's call will be recorded, and I will be standing by should you need any assistance. It is now my pleasure to turn the conference over to Melissa Franchi, VP, Head of Investor Relations. Please go ahead.

Operator: Results conference call. At this time, all participants are in a listen-only mode. Later, there will be an opportunity for a question-and-answer session. If you would like to register to ask a question, please press the star and one on your telephone keypad, and you may withdraw yourself from the queue at any time by pressing star two. Please note today's call will be recorded, and I will be standing by should you need any assistance. It is now my pleasure to turn the conference over to Melissa Franchi, VP, Head of Investor Relations. Please go ahead.

Later, there will be an opportunity for a question and answer session. If you would like to register to ask a question. Please press the star and one on your telephone keypad and you may withdraw yourself from the queue at any time by pressing star two.

Speaker Change: Please note today's call will be recorded and I will be standing by should you need any assistance. It is now my pleasure to turn the conference over to Melissa Franke, VP and head of Investor Relations. Please go ahead.

Melissa Franke: Hello, everyone and welcome to <unk> first quarter fiscal year 2025 financial results conference call on the call with me today are <unk>.

Melissa Franchi: Hello, everyone. Welcome to Rubrik's Q1 fiscal year 2025 financial results conference call. On the call with me today are Bipul Sinha, CEO, Chairman, and Co-founder of Rubrik, and Kiran Choudary, Chief Financial Officer. Our earnings press release was issued today after the market closed and may be downloaded from the investor relations page at www.ir.rubrik.com. Also on this page, you'll be able to find a copy of today's prepared remarks and a slide deck with financial highlights that, along with our earnings release, includes a reconciliation of GAAP to non-GAAP financial results. During this call, we will make forward-looking statements, including statements regarding our financial outlook for the second quarter and full year fiscal 2025. Our expectations regarding market trends, our market position, opportunities, including regarding generative AI and growth strategy, product initiatives, and expectations regarding those initiatives, and our go-to-market motions.

Melissa Franke: Co Chairman and co founder of <unk>, and Karen Sandri Chief Financial Officer.

Melissa Franke: Our earnings press release was issued today after the market closed and may be downloaded from the Investor Relations page at Www Dot IR Dot <unk> dot com.

Melissa Franke: Also on this page you'll be able to find a copy of today's prepared remarks, and a slide deck with financial highlights that along with our earnings release includes a reconciliation of GAAP to non-GAAP financial result.

Melissa Franke: During this call we will make forward looking statements, including statements regarding our financial outlook for the second quarter and full year fiscal 2025.

Melissa Franke: Our expectations regarding market trends or market position opportunity, including regarding generative AI and growth strategy product initiatives and expectations regarding those initiatives and our go to market motions.

Melissa Franke: These statements are only predictions that are based on what we believe today and actual results may differ materially.

Melissa Franchi: These statements are only predictions that are based on what we believe today, and actual results may differ materially. These forward-looking statements are subject to risks and factors that could affect our performance and financial results, which we discuss in detail in our filings with the SEC, including our final prospectus filed with the SEC pursuant to Rule 424B, dated 24 April 2024. Rubrik assumes no obligation to update any forward-looking statements we make on today's webinar. With that, I'll hand the call over to Bipul.

Melissa Franke: These forward looking statements are subject to risks and factors that could affect our performance and financial results, which we discussed in detail in our filings with the SEC, including our final prospectus filed with the SEC pursuant to rule 424 be dated April 24 2024.

<unk> assumes no obligation to update any forward looking statements, we make on today's webinar with that I'll hand, the call over to before thanks, Melissa and thank you everyone for joining us for the fourth quarterly earnings call as a public company.

Bipul Sinha: Thanks, Melissa. Thank you everyone for joining us for the first quarterly earnings call as a public company. Rubrik's first fiscal quarter of 2025 was another quarter of strong and efficient growth. We finished Q1 with subscription ARR of $856 million, growing 46% year over year, and average subscription dollar-based net retention rate of over 120%. We now have 1,859 customers with over $100,000 in subscription ARR, including 114 customers with over $1 million in subscription ARR. I am pleased with our first quarter results, and I believe we are well-positioned to take advantage of the massive market opportunity created by explosion of data, especially by AI.

First fiscal quarter of 2025.

Speaker Change: Another quarter of strong and efficient growth.

Speaker Change: Q1.

Speaker Change: Some of that at all.

Speaker Change: Third 56 million growing 46% year over year and average subscription dollar based net retention rate of over 120 footprint. We now have 1859 customers with over $100000 in subscription including.

Speaker Change: 140 customers with over $1 million in subscription ad hoc.

I am pleased with our first quarter results and I believe we are well positioned to take advantage of the massive market opportunity created by the explosion of data, especially.

Speaker Change: I would like to turn the Poland close will become worked so hard to carry out our mission of security the world's data and are helping to pave the way for a more secure and digital future.

Bipul Sinha: I would like to thank 3,000+ Rubrikans who work so hard to carry out our mission of securing the world's data and are helping to pave the way for a more secure and digital future. As this is our first earnings call, I want to share with you some context on our journey. We founded Rubrik in December 2013, and our mission is to secure the world's data. We believe that data is every organization's most valuable asset. As the world has digitized, we have seen exponential growth in data. Today's modern enterprises have massive data sprawl across multiple categories, including cloud data, enterprise data, and SaaS applications. Additionally, generative AI breakthroughs have lowered the barrier to enterprise AI adoption, and we believe will add another layer of growth in data that needs to be secured.

Speaker Change: As this is our first earnings call I wanted to share with you some context on our journey, we founded <unk> in December 2013, and our mission is to secure the world's data. We believe that data every organization most valuable asset as world has digitized.

Speaker Change: We have seen an exponential growth in data.

Speaker Change: Martin Enterprise, a massive data sprawl across multiple categories, including cloud data enterprise data and SaaS application.

Speaker Change: Additionally, <unk> AI breakthroughs have lowered the barrier to enterprise adoption and we believe will add another layer of whooping data that needs to be secured.

Speaker Change: This vigorous brawl has expanded the surface area of potential attack.

Bipul Sinha: This data sprawl has expanded the surface area of potential attack and has left organizations vulnerable in the face of an exponential rise in the amount and complexity of cyberattacks. According to a survey by our own Rubrik Zero Labs, 94% of IT and security leaders reported a significant cyberattack last year, and one-third of these victims endured at least one ransomware attack. The cybersecurity space has focused on cyber prevention strategies for the last 20, 30 years, which is clearly not enough given the increasingly rampant and sophisticated attacks on the critical data. Building taller walls and wider moats cannot prevent attacks from getting to the data. On the other hand, the legacy backup and recovery solutions have been highly ineffective for cyber recovery because their architecture was built for operational recovery. They were not designed to enable reliable recovery from cyberattacks.

Speaker Change: <unk> has left organization vulnerable in the face of an exponential rise in the amount and complexity of cyber attacks.

Speaker Change: Due to a survey by our own rubric zero lives, 94% of IP and security leader reported a significant cyber attacks last year and one third of these systems and build at least one ransomware attack.

Speaker Change: The cyber security space has focused on cyber prevented the strategies for the last 2030 years, which is clearly not enough given the increasingly liaison and sophisticated attacks on the critical data building solar was in wider move cannot prevent attacks from getting to the data on the other hand.

Speaker Change: The legacy backup and recovery solutions have been ineffective for cyber recovery because the architecture was built for operational recovery. They were not designed to enable reliable recovery from cyber attacks in fact, the infrastructure of legacy backup and recovery itself is vulnerable to side with it.

Bipul Sinha: In fact, the infrastructure of legacy backup and recovery itself is vulnerable to cyberattacks. While cyber recovery prevention strategies are important, enterprises need to assume that cyberattacks are inevitable. We believe enterprises have to have a comprehensive cyber resilience strategy to be able to quickly recover from a cyber incident and minimize operational disruptions in the midst of cyber breaches and attacks. Rubrik was founded on a vision to deliver business resilience by securing the most critical asset of any organization, that is data. Our idea was to take the backup and recovery concepts and combine it with modern cybersecurity principles into a brand new software platform to deliver complete cyber resilience. At the outset, we built a unique zero trust architecture that combines data and metadata from business applications across enterprise, cloud, and SaaS applications to create self-describing data as time series.

While cyber recovery prevention strategies are important enterprises need to assume that cyber attacks are inevitable. We believe enterprises have to have a comprehensive cyber resilience strategy to be able to quickly recover from a cyber incident and minimized operational disruption in the <unk>.

Speaker Change: Midst of cyber breaches and attack.

Speaker Change: Luke was founded on a vision to deliver business resilience by securing the most critical asset of any organization that is data.

Speaker Change: Our idea was to take the backup and recovery concepts and combined it with modern cyber security principles into brand new software platform to deliver complete cyber resilience.

Speaker Change: Outfit, we built a unique zero trust architecture that combines data and meta data from business applications across enterprise cloud and SaaS applications to create self describing data as time CD.

Speaker Change: Self describing data include application context user identity data sensitivity and application of lean in.

Bipul Sinha: Self-describing data includes application context, user identity, data sensitivity, and application lineage. This allows us to apply artificial intelligence and machine learning directly to the business data to understand emergent data security threats and deliver cyber resilience against cyberattacks. In fiscal 2023, we introduced Rubrik Security Cloud, or RSC, which provides a single platform to help enterprises secure their data across enterprise, cloud, and SaaS applications. RSC combines data protection and cyber resilience into a single cloud-native SaaS platform that detects, analyzes, and remediates cybersecurity risks and unauthorized user activities across all enterprise data estates. This platform is architected to help organizations achieve cyber resilience, which encompasses cyber posture and cyber recovery. Our platform is ultimately designed to enable organizations to confidently accelerate digital transformation and leverage the cloud to realize business agility.

Speaker Change: This allows us to apply artificial intelligence and machine learning directly to the business data to understand emerging data security first and.

Speaker Change: And deliver cyber resilience against cyber attacks.

Speaker Change: In fiscal 2023 reintroduced Rubik's security cloud of RSV, which provides a single platform to help enterprises secured via data across enterprise cloud and SaaS application RFC combined data protection and cyber resilience into a single cloud.

Speaker Change: Native SaaS platform that detect analyze it and remediate cyber security risk and unauthorized user activity across all enterprise data.

Speaker Change: This platform is architected to sell our medicines are key cyber resilience, which encompasses cyber posture and cyber recovery.

Speaker Change: Our platform is ultimately designed to enable organizations to confidently accelerated digital transformation.

Leverage the cloud period to realize business agility.

Speaker Change: Our unique and purpose built zero Trust data security approach is first of its kind and differentiate us from the alternative solutions our customers have access to I would like to expand upon why we believe we win in the marketplace.

Bipul Sinha: Our unique and purpose-built zero trust data security approach is first of its kind and differentiates us from the alternative solutions our customers have access to. I would like to expand upon why we believe we win in the marketplace. First, our zero trust architecture combines backup and recovery and cybersecurity in a single software platform that significantly shrinks the attack surface that exists with legacy solutions. Our zero trust data security platform assumes that IT infrastructure will be breached, and nothing can be trusted without authentication. As a result, our architecture delivers data availability that withstands adverse conditions and allows businesses to restore their data when infrastructure is attacked. We have a history of pioneering innovation, as highlighted by our recent win of two global InfoSec awards for Pioneering Cyber Resilience and Pioneering Data Security Posture Management.

First our zero Trust architecture, combined backup and recovery and cyber security in a single software platform that significantly shrink the attack surface that exist with legacy solution, our dealer for us data security platform assume that IP infrastructure will be pleased and nothing can be done.

Speaker Change: Without authentication as a result, our architecture delivers data availability that withstand adverse conditions and allows businesses to restore the data when infrastructure is attacked.

We have a history of pioneering innovation as highlighted by our recent win of boom globally Forsake award for pioneering cyber resilience and pioneering data security posture management.

Speaker Change: Our cloud native <unk> security cloud offers customers a single point of control from one user interface to secure data across disparate sources, including enterprise cloud on the structured data and SaaS applications.

Bipul Sinha: Second, our cloud-native Rubrik Security Cloud offers customers a single point of control from one user interface to secure data across disparate sources, including enterprise, cloud, unstructured data, and SaaS applications. We build products on top of Rubrik Security Cloud to address a myriad of use cases that help our customers achieve cyber resilience, from hardening their data security posture to recovering from a cyberattack. As an example, we recently announced the general availability of DSPM Everywhere. We believe this is the industry's only data security product suite that combines data security posture, or DSPM, with cyber recovery designed for complete cyber resilience. Our DSPM solution provides visibility into where all of an organization's data lives, who has access to the data, how is it being used, and sensitivity of the content, therefore reducing the risk of data exposure and exfiltration.

Speaker Change: Build products on top of Ruby security cloud to address a myriad of use cases that help our customers achieve cyber.

Julian from hardening, the data security posture to recovery from a cyber attack.

Speaker Change: As an example, we recently announced the general availability of the SPM everywhere. We believe this is the industry.

Speaker Change: Donnelley data security products suite that combines data security posture or the SPN with fiber recovery designed for complete cyber resilience, our DSP and solution provides visibility into where all of an organization's data list who has access to the data how is it being used.

Speaker Change: The sensitivity of the content, therefore, reducing the risk of beta exposure and exploration. This comes on the heels of our acquisition of laminar, the leading DSD and company focus on the cloud.

Bipul Sinha: This comes on the heels of our acquisition of Laminar, the leading DSPM company focused on the cloud. Third, we offer customers simplicity and ease of use at scale. From the beginning, we have built our platform to be easy to use from deployment to ongoing operations, even when managing complex environments at large scale. Our platform is also fully extensible with APIs that enable the integration with organizations' ecosystem of technologies and systems. This differentiated approach allows us to integrate end-to-end with an array of cybersecurity products, extending protection from the perimeter to the data layer. We are further enhancing our leading products by partnering with other leaders in the broader cybersecurity landscape. In Q1, we announced a new strategic partnership with CrowdStrike, which unifies rich data-centric attack context from RSC with security telemetry from CrowdStrike's Falcon XDR platform.

Speaker Change: We offer customers simplicity and ease of use at the scale from the beginning we have built our platform to be easy to use from deployment to ongoing operations.

Speaker Change: Inland managing complex enrollment at larger scale.

Our platform is also fully extensible with Apis that enable the integration with organizations ecosystem of technology and systems.

This differentiated approach allows us to integrate and to end with an array of cyber security products extending protection from the perimeter to the data layer. We are further enhancing our leading products by partnering with other leaders in the broader cyber security landscape in Q1, we announced a new strategic partner.

Speaker Change: Initiatives with goldstrike.

Speaker Change: With unified.

Speaker Change: Data centric attack context from Odyssey with Securities Elementary from cloud strife Falcon X VR platform.

With this partnership enterprises gain context, rich insights such as attacked behavior and critical data being targeted.

Bipul Sinha: With this partnership, enterprises gain context-rich insights, such as attack behavior and critical data being targeted. That drives accelerated detection, investigation, and recovery. Organizations can unify security and IT operations and focus efforts on protecting critical data. We also have a strong partnership with Zscaler, who recently awarded Rubrik as its emerging tech partner of the year. Zscaler and Rubrik partner together to help customers secure sensitive data by combining Rubrik's data-at-rest intelligence with Zscaler's data-in-motion security. We are incredibly proud of the success we have seen to date with RSC and its adoption by leading global organizations. In Q1, we continued to see strong new logo additions as well as expansions from existing customers. Today, we have over 1,800 customers with $100,000 or more in subscription ARR, up from 1,300 in the year ago period.

Speaker Change: That drive accelerated detection investigation and recovery.

Speaker Change: Organizations can unify security and IC operations.

Speaker Change: And focused effort on protecting critical data.

Speaker Change: We also have a strong partnership with Zscaler, who recently awarded rubric address emerging tech partner of the year.

Speaker Change: These killer globally partner together to help customers secure.

Speaker Change: Youre sensitive data by combining rubric data at rest intelligence with the scale of data in motion security.

Speaker Change: We are incredibly proud of the success, we have seen to date with RSC and its adoption by leading global organizations.

Speaker Change: Q1, we continued to see strong new logo additions as well as expansion from existing customers. Today, we have over 1800 customers with 100 or more in subscription data up from 1300 in the year ago period.

Speaker Change: These secured data for many large organizations across all major vertical, but I will detail two new table new lands in the healthcare space.

Bipul Sinha: We secure data for many large organizations across all major verticals, but I will detail two notable new lands in the healthcare space. First is a new Fortune 50 health insurance provider with a multimillion-dollar ARR transaction. After an audit found the company was unlikely to recover from a massive cyber event, its board of directors mandated the evaluation of alternatives to its existing legacy backup and recovery footprint. The company conducted a thorough proof of concept and selected Rubrik to address the organization's requirement to mitigate the risk and impact of a cyber attack. The customer purchased our full cyber recovery offering, which included RSC Enterprise Edition with cloud-native protection for the company's critical data across its enterprise, for private cloud and public cloud environments.

First is a new fortune 50 health insurance provider with a multimillion dollar transaction. After an audit found the company was unlikely to recover from a mosque cyber event.

Speaker Change: Its board of directors mandated the evaluation of alternatives to its existing legacy backup and recovery footprint. The company conducted a part of proof of concept and selected rubric to address the organizations requirement to mitigate the risk and impact of a cyber attack.

Speaker Change: The customer purchased our full cycle recovery offering which included RFC enterprise edition with cloud Native protection for the company's critical data across this enterprise private.

Private cloud and public cloud environments.

Speaker Change: Another example in the healthcare space is a large healthcare provider, who replaced their legacy backup and recovery provider. After a significant ransomware attack that resulted in a lend the outage and inability to recover critical data.

Bipul Sinha: Another example in the healthcare space is a large healthcare provider who replaced their legacy backup and recovery provider after a significant ransomware attack that resulted in a lengthy outage and an inability to recover critical data. After careful evaluation with board-level visibility, this organization selected RSC Enterprise Edition with unstructured data protection to secure workloads on-premises and in the cloud. The customer selected Rubrik because of our ability to address their cyber resiliency needs for both on-premises and cloud workloads from a single pane of glass. The company also purchased Rubrik Data Security Posture Management from our Laminar acquisition to reduce sensitive and regulated data exposure and manage exfiltration risk across their cloud workloads. We have seen meaningful multidimensional expansion within existing customer accounts. Our average subscription dollar-based net retention rate in Q1 was over 120%.

Speaker Change: After careful evaluation with board level visibility. This organization selected RSC enterprise edition with unstructured data protection to secure workloads on premises and in the cloud the customer selected rubric because of our ability to address the cyber resiliency needs for both on Prem.

Speaker Change: Mrs and cloud workload from a single pane of glass. The company also purchased Rubik data security posture management from our laminate acquisition to reduce sensitivity and regulated data exposure and manage exploration risks across via cloud workloads.

Speaker Change: We have seen meaningful multi dimensional expansion within existing customer accounts.

Speaker Change: Our average subscription dollar based net retention rate in Q1 was over 120% as customers increased the data the secure with us.

Bipul Sinha: As customers increase the data they secure with us, adopt new workloads and applications secured with Rubrik, and upgrade their subscriptions to higher-valued editions. This quarter, we saw a seven-figure upgrade and expansion deal at a large agricultural organization. This organization upgraded from our Foundation Edition to the Enterprise Edition with unstructured data protection, noting Rubrik anomaly detection and threat monitoring as significant value drivers. This organization also expanded their use of Rubrik cloud-native protection to secure their large cloud data footprint and to save costs relative to cloud-native backup. In addition to our continued success, we also want to highlight our future growth opportunities and areas of strategic focus. We believe there is a large and growing market opportunity for our RSC platform as more customers move their applications and data to the cloud, and as generative AI amplifies demand for securing unstructured data.

Speaker Change: <unk>, new workloads and applications secured with rubric and upgrades year subscriptions to higher valued addition.

This quarter, we saw a seven figure upgrade and expansion deal at a large agricultural organization. This organization upgraded from our foundation editions to the enterprise edition. This unstructured data protection, noting rubric anomaly detection and monitoring adds significant value.

Right.

Speaker Change: This organization also expanded their use of Google cloud Native protection to secure large cloud data footprint and to save costs related to cloud Native platform. In addition to our continued success. We also want to highlight our future growth opportunities and areas of strategic focus.

We believe there is a large and growing market opportunity for our Odyssey platform as more customers move their applications and data to the cloud.

And as generating they are amplified demand for securing unstructured data.

Plan to continue to invest in the development of Odyssey and in a company go to market motion to capitalize on this opportunity.

Bipul Sinha: We plan to continue to invest in the development of RSC and in our accompanying go-to-market motion to capitalize on this opportunity. We have a history of innovating with disruptive technology, and we intend to continue to make significant investments in research and development to further increase our product differentiation. This includes new data security functionality, the continued expansion of applications secured by Rubrik, and generative AI applications that will help organizations achieve business resilience and improve productivity. Now let me address the area we are focused on from the go-to-market perspective. As a quick background, we sell our subscription offerings into the mid-enterprise and above through our channel partners. At the high end, our field sales work with regional and global system integrators. At the lower end of our market, we use inside sales and value-added resellers. We are focused on growing our customer base.

Speaker Change: We have a history of innovating with disruptive technology, and we intend to continue to make significant investments in research and development to further increase our product differentiation. This includes new data security functionality. The continued expansion of application secured by rubric and generative AI application.

Speaker Change: That will help organizations achieve business resilience and improve productivity.

Speaker Change: Now let me address the Ada we are focused on from the go to market perspective.

Speaker Change: A quick background, we sell our subscription offering into the mid enterprise and above through our channel partners.

Speaker Change: At the high end, our field sales work with regional and global system integrators at the lower end of our market, we use incisive and value added resellers.

We are focused on growing our customer base, we believe any organization with any application in data any significant is the potential global customer.

Bipul Sinha: We believe any organization with any application and data of any significance is a potential Rubrik customer. As cyber attacks increase in scale and sophistication, amidst accelerated digitization and ever-evolving data regulations, organizations are rethinking how to secure data across the entirety of their topology. We continue to invest in customer acquisition to meet the growing needs of these organizations seeking to achieve data security. We are also focused on expansion within our existing customer base by continuing to move customers to our more premium subscription edition and by covering additional scale and scope of data managed, particularly as cyber resilience is a growing focus in cloud and SaaS environments. We continue to refine our go-to-market to accelerate cross-sell of our newer solutions, such as DSPM, and newer application footprints in SaaS and in the cloud.

Cyber attacks, increasing the scale and sophistication.

Speaker Change: Digitization and ever evolving data regulations.

Speaker Change: Organizations are rethinking how to secure data across the entirety of vehicle policies.

We continue to invest in customer acquisition to meet the growing needs of these organizations seeking to achieve data security.

Speaker Change: We are also focused on expansion within our existing customer base by continuing to move customers to our more premium subscription additions and by covering additional scale and scope of data management, particularly as cyber resilience is a growing focus in cloud and SaaS environments.

Speaker Change: We continue to refine our go to market through accelerated cross sell of our newer solutions, such as ESPN and newer application footprint in SaaS and in the cloud Lastly, we believe we have a substantial international opportunity as international organization. The struggle with the same data protection and security.

Bipul Sinha: Lastly, we believe we have a substantial international opportunity as international organizations struggle with the same data protection and security challenges that we are currently solving for our US customers. We plan to continue to expand our global footprint into existing and new international markets. We generated approximately 32% of our total revenue in fiscal 2024 from customers outside of the US, which highlights the room for growth. In closing, I would like to thank all Rubrikans, our customers, partners, and investors for their support and dedication in helping us achieve the important milestone of becoming a public company and being partners on our journey ahead. We are proud of our mission of securing critical business data, enabling enterprises to remain resilient in the face of cyberattacks, and helping them accelerate their digital transformation.

Speaker Change: <unk> that we are currently solid for our U S customers, we plan to continue to expand our global footprint into existing and new international markets.

Speaker Change: We generated approximately 32% of our total revenue in fiscal 2024 from customers outside of the U S, which highlights the room for growth.

Speaker Change: In closing I would like to time all Rubicon.

Speaker Change: Our customers partners and investors for their support and dedication in helping us achieve the important milestone of becoming a public company and being partners on our journey ahead.

Speaker Change: Im proud of our mission of securing critical business data, enabling enterprises to remain resilient in the face of cyber attacks and helping them accelerate their digital transformation.

Bipul Sinha: Our zero trust architecture is unique and positions us as a differentiated leader in a large market in transition and filled with legacy incumbents. Our strong Q1 results highlight this exciting market opportunity, our multiple drivers of growth, and our strong go-to-market execution, key components to building an enduring company. We are on a mission to secure the world's data, and we are just getting it started. With that, I will now turn the call over to Kiran to review our financials. Kiran.

Speaker Change: Once the data and we are just getting started with that I will now turn the call over to Karen to review our financials. Thank you Paul and good afternoon, everyone.

Kiran Choudary: Thank you, Bipul, and good afternoon, everyone. I'm pleased to report that we delivered a strong start to fiscal 2025 with strength across all our key operating metrics, including subscription ARR, subscription contribution margin, and free cash flow. Rubrik was started 10 years ago with a vision of data security and cyber resilience, and our recent performance highlights the momentum around this market transformation. Before we go through our financial performance for Q1, I'd like to give you a brief overview of our business model to contextualize our results. Unless otherwise noted, growth rate comparisons are on a year-over-year basis. We launched our first commercial product, Converged Data Management, in fiscal 2016. This platform combined data and metadata into a single layer of software to provide zero trust data protection.

Karen Sandri: I'm pleased to report that we delivered a strong start to fiscal 2025 with strength across all our key operating metrics, including subscription there are subscription contribution margin and free cash flow.

Speaker Change: Ruby request started 10 years ago with a vision of data security and cyber resilience and our recent performance highlights the momentum around this market transformation.

Speaker Change: Before we go through our financial performance for the first quarter I would like to give you a brief overview of our business model to contextualize our results.

Speaker Change: Otherwise noted growth rate comparisons are on a year over year basis.

Speaker Change: We launched our first commercial product converged data management in fiscal 2016.

Speaker Change: This platform combined data and metadata into a single layer of software to provide zero Trust data protection.

Speaker Change: This was our original data protection platform that secured enterprise applications, and where solar and under a perpetual license with associated maintenance contracts.

Kiran Choudary: This was our original data protection platform that secured enterprise applications and was sold under a perpetual license with associated maintenance contracts. By fiscal 2020, we had expanded the use cases of our platform to secure cloud-native applications in addition to enterprise applications. We rebranded Converged Data Management to Cloud Data Management, or CDM, and introduced our first subscription term-based licenses. By this time, we had also launched our first SaaS data security products, which was built on top of our Cloud Data Management platform. This includes ransomware monitoring and investigation, which is known as anomaly detection, and sensitive data monitoring and management, which is now known as sensitive data monitoring. We sold these solutions on a standalone basis. In fiscal 2023, to meet customer demands for data security in a single unified cloud-based control plane, we launched Rubrik Security Cloud, or RSC, after five years of R&D.

Speaker Change: Fiscal 2020, we had expanded the use cases of our platform to secure cloud native applications. In addition to enterprise applications.

Speaker Change: We rebranded converged data management to cloud data management or CDM and introduced our first subscription term based licenses.

Speaker Change: By this time, we have also launched our first SaaS data security products, which was built on top of our cloud data management platform.

Speaker Change: This includes ransomware monitoring an investigation, which is known as anomaly detection and sensitive data monitoring and management, which is now known as sensitive data monitoring.

Speaker Change: We sold these solutions on a standalone basis.

Speaker Change: In fiscal 2023 to meet customer demands for data security in a single unified cloud based control plane, we launched robotics equity Clowder RSC after five years of R&D.

Speaker Change: RF provides one point of control to secure data, regardless of where it lives across enterprise cloud and SaaS applications and this enables seamless adoption of <unk> by our customers. In addition, as part of our cloud transformation, we began transitioning the sale of rubric branded appliances, which our customers use to secure enterprise data from us to our Pos.

Kiran Choudary: RSC provides one point of control to secure data regardless of where it lives across enterprise, cloud, and SaaS applications, and this enables seamless adoption of RSC by our customers. In addition, as part of our cloud transformation, we began transitioning the sale of Rubrik-branded appliances, which our customers use to secure enterprise data from us to our partners. Today, we primarily sell RSC subscriptions. We currently go to market with RSC in the form of subscription editions: Foundation, Business, and Enterprise. We also recently announced the Enterprise Proactive Edition, which includes DSPM Everywhere. These editions all offer data protection for the data types our platform can secure, and there are data security products that are included in each subscription tier. We price our editions primarily based on data volume secured and data security capabilities.

Speaker Change: <unk>.

Speaker Change: Today, we primarily sell RSC subscriptions, we currently.

Speaker Change: Go to market with RSV in the form of subscription additions foundation business and enterprise.

Speaker Change: Also recently announced the enterprise proactive edition, which includes the SPM everywhere.

Speaker Change: These additions all of our data protection for the data types of platform can secure.

Speaker Change: And then our data security products that are included in each subscription tier.

Speaker Change: We price our additions primarily based on data volume secured and data security capabilities.

Speaker Change: Our key topline metric a subscription IRR, which we believe best illustrates our success in acquiring new customers and maintaining and expanding our relationships with existing customers.

Kiran Choudary: Our key top-line metric is subscription ARR, which we believe best illustrates our success in acquiring new customers and maintaining and expanding our relationships with existing customers. Our cloud ARR includes RSC, as well as our mostly previously sold standalone SaaS-based data protection and data security products. We ended Q1 with subscription ARR of $856 million, up 46%. Net new subscription ARR was $72 million, up 32%, a record high over the last year. These strong results were driven by the combination of solid new logo lands, ongoing customer expansions, large transactions, and strong linearity. We also had notable strength in large transactions in the quarter, as highlighted by some of our earlier customer stories.

Speaker Change: Our cloud Anr includes RFC as well as our mostly previously sold Standalone SaaS based data protection and data security products.

Speaker Change: We ended the first quarter with subscription anr of $856 million up 46%.

Speaker Change: Net new subscription Anr was $72 million up 32% a record high over the last year.

Speaker Change: These strong results were driven by the combination of solid new logo lands ongoing customer expansions large transactions and strong linearity.

Speaker Change: We also had notable strength in large transactions in the quarter as highlighted by some of our earliest customer stories. We now have 114 customers with over $1 million in subscription IRR up from 99 last quarter and <unk> 71 in the year ago period.

Kiran Choudary: We now have 114 customers with over $1 million in subscription ARR, up from 99 last quarter, and 71 in the year ago period. Of the 46% subscription ARR growth in Q1, we believe approximately 3 percentage points are a result of transitioning our existing maintenance customers to Rubrik Security Cloud. This compares to 4 percentage points of benefit last quarter and 13 percentage points in the year ago period. We expect this benefit will continue to moderate over the next few quarters. We continue to drive sales of our SaaS solutions, as evidenced by our cloud ARR of $606 million in Q1, up 104%. We have a compelling land and expand model that allows for a significant expansion opportunity after an initial contract.

Speaker Change: After 46% subscription AOR growth in Q1, we believe approximately three percentage points, a result of transitioning our existing maintenance customers to rubric security cloud.

This compares to four percentage points of benefit last quarter, and 13 percentage points in the year ago period.

Speaker Change: We expect this benefit will continue to moderate over the next few quarters.

Speaker Change: We continue to drive sales of SaaS solutions as evidenced by our cloud IRR of $606 million in Q1 up 104%, we have a compelling land and expand model that allows for a significant expansion opportunity upper initial contract with <unk>.

Speaker Change: Three main vectors that drive expansion with our customers are one the growth of data from applications already secured by rubric to additional applications secured on our platform and three adoption of additional data security products are.

Kiran Choudary: The three main vectors that drive expansion with our customers are one, the growth of data from applications already secured by Rubrik. Two, additional applications secured on our platform. Three, adoption of additional data security products. Our four-quarter average subscription dollar-based net retention rate was over 120% in Q1, and we saw a 41% increase in customers with subscription ARR of $100,000 or more to 1,859. We have rapidly progressed through our cloud transformation. Our subscription revenue was $172 million, representing 92% of total revenue. Subscription revenue growth was 59% as headwinds to our revenue growth from more ratable revenue are moderating. Total revenue was $187 million, up 38%. Before turning to gross margins, expenses and profitability, I would like to note that I will be discussing non-GAAP results going forward unless otherwise noted.

Speaker Change: Our full quarter average subscription dollar based net retention rate was over 1% in Q1, and we saw a 41% increase in customers with subscription IRR of $100000 or more to $1859.

Speaker Change: We are rapidly progress through our cloud transformation, our subscription revenue was $172 million, representing 92% of total revenue.

Speaker Change: Subscription revenue growth was 59% as headwinds to our revenue growth from more ratable revenue are moderating.

Speaker Change: Total revenue was $187 million up 38%.

Speaker Change: Before turning to gross margins expenses and profitability I would like to note.

Speaker Change: That I will be discussing non-GAAP results going forward unless otherwise noted.

Speaker Change: As a reminder, our GAAP financial results along with a reconciliation between GAAP and non-GAAP results can be found in our earnings press release and supplemental financials.

Kiran Choudary: As a reminder, our GAAP financial results, along with the reconciliation between GAAP and non-GAAP results, can be found in our earnings press release and supplemental financials. We are focused on delivering strong gross margins, improving our subscription ARR contribution margin, and growing free cash flow. Our non-GAAP gross margin was 75% in Q1 compared to 74% in the year ago period, driven by a change in product mix, including the transition of the sale of Rubrik branded appliances from us to our partners and the improved efficiency of our customer support organization. This was partially offset by higher cloud hosting costs due to the development in and growth of our SaaS solutions, which we expect to continue to scale in the future. We look at subscription ARR contribution margin as a key measure of profitability.

Speaker Change: We are focused on delivering strong gross margins, improving our subscription contribution margin and growing free cash flow.

Speaker Change: Our non-GAAP gross margin was 75% in Q1.

Speaker Change: Compared to 74% in the year ago period, driven by a change in product mix, including the transition of the sale of rubric branded appliances from us to our partners and the improved efficiency of our customer support organization.

Speaker Change: This was partially offset by higher cloud hosting costs due to the development and growth of our SaaS solutions, which we expect it to continue to scale in the future.

Speaker Change: We look at subscription in our contribution margin as a key measure of profitability.

Speaker Change: This is calculated as subscription era less non-GAAP cost of subscription revenue.

Kiran Choudary: This is calculated as subscription ARR less non-GAAP cost of subscription revenue and less non-GAAP operating expense, and then divided by subscription ARR. We find this to be a more relevant metric to demonstrate improvement in operating leverage than operating margins or free cash flow because it removes the impact from our cloud transformation as well as changing billings and payment terms. We believe the improvement in our subscription ARR contribution margin demonstrates our ability to drive operating leverage at scale. Subscription ARR contribution margin was -11% in Q1 compared to -32% in the year ago period as we saw strong subscription ARR growth and efficiency gains across the business. Operating expenses this quarter also included $23 million in employer payroll taxes associated with our IPO. Adjusting for this one-time expense in Q1, our subscription ARR contribution margin would have been -8%.

Speaker Change: And less non-GAAP operating expense and then divided by subscription IRR.

Speaker Change: We find this to be a more relevant metric to demonstrate improvement in operating leverage then operating margins our free cash flow because it removes the impact from our cloud transformation as well as changing billings and payment terms.

Speaker Change: We believe the improvement in our subscription are contribution margin demonstrates our ability to drive operating leverage at scale.

Speaker Change: Ascription Air our contribution margin was negative 11% in Q1 compared to negative 32% in the year ago period, as we saw strong subscription and our growth and efficiency gains across the business operating expenses. This quarter also included $23 million in employer payroll taxes associated with our IPO.

Speaker Change: Adjusting for this onetime expense in Q1, our subscription are our contribution margin would have been negative 8%.

Speaker Change: Free cash flow was negative $37 million compared to negative $23 million in the year ago period.

Kiran Choudary: Free cash flow is -$37 million compared to -$23 million in the year ago period. This quarter included a cash outlay of $21 million for the aforementioned employer payroll taxes associated with our IPO. Adjusting for employer payroll taxes, the improvement in free cash flow is higher due to higher sales and favorable timing of some customer payments. Turning to our balance sheet. We completed our IPO in April, which resulted in proceeds of $710 million net of underwriting discounts and commissions. We ended Q1 in a strong cash position with $606 million in cash equivalents, and short-term investments and $297 million in debt. Before I walk you through our outlook for Q2 and the full fiscal year 2025, I would like to provide some context around our guidance.

This quarter included a cash outlay of $21 million for the aforementioned employer payroll taxes associated with our IPO.

Speaker Change: Adjusting for employer payroll taxes, the improvement in free cash flow is higher due to higher sales and favorable timing of some customer payments.

Speaker Change: Turning to our balance sheet, we completed our IPO in April which resulted in proceeds of $710 million net of underwriting discounts and commissions.

Speaker Change: We ended Q1 in a strong cash position with $606 million in cash cash equivalents and short term investments and $297 million in debt.

Speaker Change: Before I walk you through our outlook for Q2, and the full fiscal year 2025, I would like to provide some context around our guidance.

Speaker Change: We continue to see strong secular demand for our solutions as rubric becomes a more strategic investment for large enterprises, we are increasing exposure to large transactions.

Kiran Choudary: We continue to see strong secular demand for our solutions. As Rubrik becomes a more strategic investment for large enterprises, we have increasing exposure to large transactions. The exact timing of which can vary between quarters. We had an exceptionally strong ARR performance in Q1, in part driven by some large transactions. Our guidance takes a prudent approach as it's early in the year and we still face an uneven macro environment. That being said, we have a robust pipeline, and we remain confident about the demand for our differentiated offerings and the powerful secular trends fueling our growth. In addition, we'll continue to progress through our cloud transformation and cloud ARR will continue to grow faster than subscription ARR. We expect the benefit to subscription ARR growth from existing maintenance contracts to subscription to continue to taper down to low single digits through fiscal 2025.

Speaker Change: Timing of which can vary between quarters.

Speaker Change: We had an exceptionally strong performance in the first quarter in part driven by some large transactions.

Speaker Change: Our guidance takes a prudent approach as it's early in the year and we still face an uneven macro environment.

Speaker Change: That being said, we have a robust pipeline and we remain confident about the demand for our differentiated offerings and the powerful secular trends fueling our growth.

Speaker Change: In addition, we will continue to progress through our cloud transformation and cloud era will continue to grow faster than subscription IRR.

Speaker Change: We expect the benefit to subscription are our growth from existing maintenance contracts to subscription to continue to taper down to low single digits through fiscal 2025.

Speaker Change: The headwind to revenue growth from increasing ratable revenue and transition away from commodity group breakdown appliances will continue to moderate in fiscal 2025.

Kiran Choudary: The headwinds to revenue growth from increasing ratable revenue and transition away from commodity Rubrik branded appliances will continue to moderate in fiscal 2025. Revenue and revenue growth can fluctuate due to a number of variables, including the pace at which we add new RSC customers and the pace at which we continue to migrate our existing customers to RSC. As an example, if we generate more cloud ARR related to non-cloud ARR than we expected, or if fewer existing customers than we expected need transition licenses because they fully migrate to RSC, we will have lower revenue in the near term because of the ratable nature of cloud revenue recognition. Because of these dynamics, we point to subscription ARR as our key top-line metric.

Speaker Change: Revenue and revenue growth can fluctuate due to a number of variables, including the pace at which we add new RFE customers and the pace at which we continue to migrate our existing customers to RSV.

Speaker Change: As an example.

Speaker Change: If we generate more cloud they are related to non cloud era than we expected on a fewer existing customers than we expected need transition licenses.

Speaker Change: Was that fully migrate to RSC, we will have lower revenue in the near term because of the ratable nature of cloud revenue recognition because of these dynamics, we appoint to subscription era as our key top line metric in.

Speaker Change: In terms of operating investments will continue to invest in go to market and R&D to drive innovation in the large and growing market we operate.

Kiran Choudary: In terms of operating investments, we'll continue to invest in go-to-market and R&D to drive innovation in the large and growing market we operate in. We assume billing duration and payment terms continue to contract modestly through fiscal year 2025, which will be headwinds to free cash flow. Hence, we point to subscription ARR contribution margins to measure operating leverage. Now turning to guidance for Q2 of fiscal 2025. For Q2 of fiscal 2025, we expect total revenue in the range of $195 million to $197 million, implying 29% to 30% growth as the cloud transformation headwinds continue to moderate. We expect non-GAAP subscription ARR contribution margins between -13.5% to -12.5%.

Speaker Change: We assume billings duration and payment terms continue to contract modestly through fiscal year, 2025, which will be headwinds to free cash flow.

Speaker Change: Hence we point a subscription contribution margins to measure operating leverage.

Now turning to guidance for the second quarter fiscal 2025.

Speaker Change: For the second quarter of fiscal 2025, we expect total revenue in the range of $195 million to $197 million implying.

Speaker Change: Implying 29% to 30% growth.

Speaker Change: As the cloud transformation headwinds continue to moderate.

We expect non-GAAP subscription of our contribution margins between negative 13, 5% to negative 12, 5%.

Speaker Change: We expect non-GAAP EPS of negative <unk> 52.

Kiran Choudary: We expect non-GAAP EPS of -$0.50 to -$0.48 based on approximately 179 million weighted average shares outstanding in Q2. For the full year of fiscal 2025, we expect subscription ARR in the range of $983 million to $997 million, reflecting a year-over-year growth rate of 25% to 27%. To help with modeling seasonalities for the year, we expect the net new ARR in H1 and H2 to be roughly equal.

Speaker Change: To negative 48.

Based on approximately 179 million weighted average shares outstanding in the second quarter for.

Speaker Change: For the full year fiscal 2025, we expect subscription IRR in the range of $983 million to $997 million, reflecting a year over year growth rate of 25% or 27%.

Speaker Change: To help with modeling seasonality for the year, we expect our net new <unk> in the first and second half of the year to be roughly equal.

We expect total revenue for the full year fiscal 2025 in the range of $810 million to $824 million implying.

Bipul Sinha: We expect total revenue for the full year fiscal 2025 in the range of $810 million to $824 million, implying 29% to 31% growth. We expect non-GAAP subscription ARR contribution margins between -12.5% and -11.5%. We plan to continue to invest in this enormous opportunity ahead of us while delivering efficient growth at scale. We expect non-GAAP EPS of -$2.35 to -$2.25 based on approximately 154 million weighted average shares outstanding for the full year.

Kiran Choudary: We expect total revenue for the full year fiscal 2025 in the range of $810 million to $824 million, implying 29% to 31% growth. We expect non-GAAP subscription ARR contribution margins between -12.5% and -11.5%. We plan to continue to invest in this enormous opportunity ahead of us while delivering efficient growth at scale. We expect non-GAAP EPS of -$2.35 to -$2.25 based on approximately 154 million weighted average shares outstanding for the full year.

Speaker Change: Implying 29% to 31% growth.

Speaker Change: We expect non-GAAP subscription they are our contribution margins between negative 12, 5% and negative 11, 5%.

Speaker Change: We plan to continue to invest in this enormous opportunity ahead of us while delivering efficient growth at scale.

Speaker Change: We expect non-GAAP EPS of negative $2 75 to negative $2 and 25.

Speaker Change: Based on approximately 154 million weighted average shares outstanding for the full year, we expect free cash flow of negative $115 million to negative $95 million or negative $92 million to negative $72 million without the onetime payroll taxes related to the vesting of equity awards in connection with our IPO.

Bipul Sinha: We expect free cash flow of -$115 to -95 million or -$92 to -72 million without the one-time payroll taxes related to the vesting of equity awards in connection with our IPO. In closing, we are proud of our performance this past quarter and look forward to continuing the momentum into year-end and beyond. With that, we'd like to open up the call for any questions.

Kiran Choudary: We expect free cash flow of -$115 to -95 million or -$92 to -72 million without the one-time payroll taxes related to the vesting of equity awards in connection with our IPO. In closing, we are proud of our performance this past quarter and look forward to continuing the momentum into year-end and beyond. With that, we'd like to open up the call for any questions.

Speaker Change: Okay.

Speaker Change: In closing we are proud of our performance this past quarter and look forward to continuing the momentum into year end and beyond.

Speaker Change: With that wed like to open up the call for any questions.

Speaker Change: At this time, if you would like to ask a question. Please press star and one on your telephone keypad you may withdraw yourself from the queue at any time by pressing star two.

Operator: At this time, if you would like to ask a question, please press the star and one on your telephone keypad. You may withdraw yourself from the queue at any time by pressing star two. We do ask that you limit yourself to one question to allow time for everyone to ask their question. We'll move first to Kash Rangan with Goldman Sachs. Your line is open.

Speaker Change: We do ask that you limit yourself to one question to allow time for everyone to ask their question. We will move first to cash Rankin with Goldman Sachs. Your line is open.

Alright, Thank you very much Jim congratulations on your IPO and the first quarter as a public company.

Kash Rangan: Hi. Thank you very much. Bipul and team, congratulations on your IPO and the first quarter as a public company. Bipul, if you could talk about the month of April and also the month of May, the last month of the quarter and the first month starting the quarter, did you notice any changes in business conditions? One for you, Kiran, to just keep it short and sweet. What are the fundamental drivers of free cash flow conversion from revenue, be it unit economics, cost to acquire, lifetime value of the customer? How should we think about Rubrik's position to be able to generate free cash flows in the future? Thank you so much.

Speaker Change: If you could talk about the month of <unk>.

And also the month of May the last month of the quarter and the first month, starting the quarter did you notice any changes in business conditions and one for you just keep it short and sweet.

Speaker Change: And are the fundamental drivers of free cash flow conversion from revenue beat unit economics cost to acquire a lifetime value of the customer how should we think about <unk> position to be able to generate free cash flows in the future. Thank you so much.

Speaker Change: Thanks, Kash I appreciate it.

Bipul Sinha: Thanks, Kash. Appreciate it. In the month of April, we did not see any significant change in the customer buying behavior. Having said that, macro environment remains uneven, and as a newly public company, we are prudent in our approach. In the month of April, we didn't see any significant change. Kiran?

Speaker Change: In the month of April we did not see any significant change in the customer buying behavior.

Speaker Change: Syntax macro environment remains uneven and as a newly public company. We are prudently not approach within the month of April we didn't see any significant change.

Speaker Change: Yes.

Speaker Change: Our cash I'll just add here on your question on free cash flow. So as you know.

Kiran Choudary: Hi, Kash. I'll just add here on your question on free cash flow. As you know, we collect cash upfront in our transactions, so we benefit from that. Fundamentally, free cash flow leverage is driven by operating leverage. For us, operating leverage, the best metric right now through our cloud transformation is the sub ARR contribution margin, which we have improved over the past few years. That'll be a key driver. Obviously the collections dynamic, which, we are increasingly collecting more annual payments, but multi-year payments are still the majority. Those are the two drivers for free cash flow.

Speaker Change: We collect cash upfront and her transactions. So we benefit from that but fundamentally free cash flow leverage is driven by operating leverage and for us the operating leverage the best metric right now to our cloud transformation and the some Iraqi integration margin, which we have improved over the past few years, so that will be a key driver and obviously the collections dynamic glitch.

Speaker Change: We are increasingly collecting more annual payments, but multi year payments are still the majority two drivers for free cash flow.

Speaker Change: And just on the subscription gross margin what are the drivers is that scale of cost of acquisition improve retention improved upsell what cost number two so subsequent certainly on a contribution margin. The two drivers are obviously gross margin and operating leverage so gross margin we have seen leverage over the last few years with the exit of the hardware.

Kash Rangan: Just on the subscription gross margin, what are the drivers? Is it scale or cost of acquisition, improved retention, improved upsell? What causes-

Kiran Choudary: Yep.

Kash Rangan: Yeah.

Kiran Choudary: Subscription ARR contribution margin, the two drivers are obviously gross margin and operating leverage. Gross margin, we have seen leverage over the last few years with the exit of the hardware business, and we are in a long-term range of 75% to 80%. Then when you look at the operating expense line items, starting with R&D, we are hiring globally now and at scale, we are getting more leverage with the balance of great talent as well. In sales and marketing, with the growth of renewals in our business, it's still not the majority, as well as increasing scale on our newer investments, international, federal as well, we'll see increasing leverage on the sales and marketing line. Lastly, on G&A, we did step up G&A costs as a public company, but you'll see benefits of scale as well there.

Speaker Change: <unk> and we are in our long term range of 75% to 80% and then when you look at the operating expense line items, starting with R&D. We are hiring globally now and have scale, we're getting more leverage with the balance of great talent as well and in sales and marketing with the growth of renewables in our business, it's still not the majority as well as <unk>.

Speaker Change: Increasing scale on our newer investments international federal as well you can see increasing leverage on the sales and marketing line and lastly on G&A, we did step up G&A costs as a public company, but you can see benefits of scale as well.

Speaker Change: Awesome. Thank you so much.

Speaker Change: Thank you Kash.

Kash Rangan: Awesome. Thank you so much.

Well move next to Korea with Barclays. Your line is open.

Bipul Sinha: Thank you, Kash.

Melissa Franchi: Thank you, Kash.

Operator: We'll move next to Saket Kalia with Barclays. Your line is open.

Speaker Change: Okay, Great Hey, guys. Thanks for taking my questions here.

Saket Kalia: Okay, great. Hey, guys, thanks for taking my questions here, and I echo my congrats on your first quarter as a public company. Bipul, maybe just to start with you. You know, a lot of great customer examples in your prepared remarks. Can you just talk about the growing security tools that Rubrik is adding on top of secure backup? You know, I think more of your customers are opting for higher end bundles, which of course include more security. Talk to us a little bit about how they're using those tools and what you're hearing from those customers that are increasingly using the security components.

Speaker Change: Echo my congrats on your first quarter as a public company.

Speaker Change: <unk>, maybe just to start with you.

Speaker Change: Lot of great customer examples in your prepared remarks.

Speaker Change: And can you just talk about the growing security tools that rubric is adding on top of secure backup.

Speaker Change: More of your customers are opting for higher end bundles, which of course include more security purpose, a little bit about how they're using those tools and what you're hearing from those customers that are increasingly using the security components.

Speaker Change: Thanks, Okay. So.

Speaker Change: As you reckon rubric has build a comprehensive cyber resilience platform that combines data security posture management as well as cyber recovery in a single zero Trust architecture to deliver through cycle recovery and cyber resilience on our crude has some soon is that enterprises will get please.

Bipul Sinha: Thanks, Saket. As you reckon, Rubrik has built a comprehensive cyber resilience platform that combines data security posture management as well as cyber recovery in a single zero trust architecture to deliver true cyber recovery and cyber resilience. Our core assumption is that enterprises will get breached and you cannot stop the unstoppable. How do enterprises prepare themselves for inevitable cyber attack and to deliver quick recovery so that their services are back up and running and they can continue their business?

Speaker Change: We cannot solve the unstoppable.

Speaker Change: How does how do enterprises prepare themselves for inevitable cyber attack and to deliver quickly Burgundy. So that their services are back up and running and they can continue this business. So we have built a set of capabilities on top of our platform.

Bipul Sinha: We have built a set of capabilities on top of our platform from anomaly detection, which actually tells you the point of infection in the scope of an attack, to threat hunting and monitoring, to be able to detect malware in your data stream so that you are delivering clean recoveries, to be able to sensitive data classification, to understand exfiltration risk, to understand what has been exfiltrated, and understand double extortion ransomware risk. We have the user access intelligence to understand the surface area of attack. We have built a comprehensive data security solution suite on top of our Rubrik Security Cloud platform to really deliver end-to-end comprehensive cyber resilience and cyber recovery.

Speaker Change: And normally detection, which actually dose point of infection in the scope of an attack to accounting and monitoring to be able to detect malware immune data stream. So that you are delivering clean recoveries to be too sensitive data classification to understand exploration risk to understand what has been <unk>.

Speaker Change: Retreated and understand double extortion landfill munis, we have the user access intelligence to understand the surface area of attack. So we have built a comprehensive data security solution suite on top of <unk> security cloud platform to really deliver end to end comprehensive.

Speaker Change: Cyber resilience and security company.

Speaker Change: Got it.

Speaker Change: If I could sneak in a follow up here maybe for you for the follow up it was a great deal on a row this quarter I.

Saket Kalia: Got it. If I could sneak in a follow-up. Kiran, maybe for you for the follow-up, it was a great beat on ARR this quarter. You know, I saw that we flowed through some of the upside, but not all of it. Just to make sure the question is asked, are there any timing elements that we should consider for ARR this year, given the beat and given the adjustment to guide? To your point, still very early in the year, but wanna make sure the question's asked.

I saw that we flowed through some of the upside but not all of it just to make sure of the question is asked are there any timing elements that we should consider.

Speaker Change: This year, given the beat and given the.

Speaker Change: The adjustment to guide to your point still very early in the year, but want to make sure the questions asked.

Speaker Change: Sure socket.

Speaker Change: So obviously, we got off to a very strong start to the year. It was an exceptional quarter, but we benefited from some large transactions.

Bipul Sinha: Sure, Saket. Obviously we got off to a very strong start to the year. It was an exceptional quarter, but we benefited from some large transactions. It's still early in the year. We are a recently public company, and the environment going ahead could be uncertain in election year. We want to be prudent with our guidance and feel really good about the numbers we are putting forward in terms of guidance, which we are very confident in terms of the outlook.

Speaker Change: Still early in the year, if we had a recently public company and the environment going ahead could be uncertain election year, So you've already product with our guidance and feel really good about the numbers. We are putting forward in terms of guidance, which we're very confident in terms of the outlook.

Speaker Change: Thanks, very much for the time guys Congrats again.

Saket Kalia: Thanks very much for the time, guys. Congrats again.

Speaker Change: We'll move next to Fatima <unk> with Citi. Your line is open.

Operator: We'll move next to Fatima Boolani with Citi. Your line is open.

Yes.

Speaker Change: Hi, Thank you for taking my question.

Fatima Boolani: Hi, thank you for taking my questions. Bipul, I wanted to unpack some of the broad-based strength in business activity, and specifically wanted to hear some of your comments on what type of procurement and buying behavior you're seeing from mid-size enterprises versus large, larger enterprises. The spirit of the question really here is, you know, it is an uneven macro and a lot of your peers in the software complex have just experienced a lot of volatility, certainly with some of the smaller customers, and just deal cycle elongation on the larger side. I'm curious how you've sort of been able to buck the trend, in executing well across both those vectors. Thanks very much.

Speaker Change: And then Paul I wanted to unpack that broad base strength in business activity.

Fatima: You wanted to hear some of your comments on what type of procurement and buying behavior, you're seeing from midsize enterprises versus large larger enterprises.

Speaker Change: And the spirit of the question really hearing you now.

Speaker Change: It is an uneven macro and one of your peers in the software complex.

Speaker Change: <unk> experienced a lot of volatility certainly with some of the smaller customers and just deal cycle elongation on the larger side I'm curious, how you sort of thinking of a buck the trend.

Speaker Change: In executing well across both those factors thanks very much.

Speaker Change: Thanks, Burton if you look at.

Bipul Sinha: Thanks, Fatima. If you look at Rubrik's offering, we are delivering cyber recovery, cyber resilience solution to ensure that enterprises can recover from ransomware attack and other kind of cyber attacks which are inevitable. We are at the top of the heap when it comes to investing in cybersecurity, particularly around ransomware incident. We have a very unique and differentiated platform. We are not seeing any significant impact in the demand. What we are also seeing is the customer's sense of urgency in having these solutions. If you look at the broader landscape, there has been a lot of investment in cyber prevention solutions around network, endpoint, perimeter, and cloud, but the cyber recovery is a little bit of an afterthought. Now folks are realizing that recovery has been underinvested.

Speaker Change: Offering we are delivering cyber recovery cyber resilience solution to ensure that enterprises can recover from ransomware attack another kind of cyber attacks, we challenge with table Sylvia.

Speaker Change: The top of the heap when it comes to <unk>.

Speaker Change: Investing in cyber security, particularly around ransomware incident, and we have a very unique and differentiated platform. So we are not seeing any significant impact in the demand.

Speaker Change: And what we're also seeing is the customers' sense of urgency in having these and having these solutions so.

Speaker Change: And if also you can look at the broader landscape. There has been a lot of investments in cyber prevention solutions and owned network endpoint cloud.

Speaker Change: Cloud, but the size of the company is little bit of a two part and now for some of these rising that recovery has been under invested and to ensure the continuing operation the need to have solid cyber resilience recovery because of tax and again inevitable. So we are seeing significant strength in terms of the demand obviously.

Bipul Sinha: To ensure continuing operation, they need to have solid cyber resilience, cyber recovery because attacks are, again, inevitable. We are seeing significant strength in terms of the demand. Obviously, procurement dynamics within the macro is sometimes can be a little cumbersome because there's more deal scrutiny in terms of more people involved in getting deals, but we are not seeing any significant change in the demand landscape.

Speaker Change: Procurement dynamics given the macro is sometimes can be little cumbersome because in this mood dealers scrutiny in terms of the loan and getting deals, but we are not seeing any significant changes in demand landscape.

Speaker Change: Okay helpful.

Speaker Change: Okay.

Fatima Boolani: Thank you, Bipul.

Speaker Change: Well move next to Andrew Nowinski with Wells Fargo. Your line is open.

Operator: We'll move next to Andrew Nowinski with Wells Fargo. Your line is open.

Speaker Change: Yeah.

Speaker Change: Okay. Good afternoon, and congrats on a nice quarter as well.

Andrew Nowinski: Okay. Good afternoon, and congrats on a nice quarter as well. I wanna ask a question on the security side, and specifically Laminar. You know, I think most people understand your security capabilities and why other vendors can't provide those capabilities applied to the business data. Where there might be some overlap is on the DSPM side. I was wondering if you could explain why Laminar is different from the other DSPM offerings in the market from CrowdStrike, Palo Alto, and others. What you're seeing from a pipeline perspective as it relates to that new high-end bundle that you introduced that includes Laminar. Thanks.

Andrew Nowinski: I wanted to ask a question on the security side and since we Laminarin I think most people understand your security capabilities and why other vendors can't provide.

Speaker Change: Those capabilities apply.

Speaker Change: Applied to the business data, but where there might be some overlap on the SPM side. So I was wondering if you could explain why <unk> is different from the other <unk> offerings in the market from crowd strike in Palo Alto and others and then what Youre seeing from a pipeline perspective as it relates to that new high end bundle introduced that includes lamina.

Speaker Change: Thanks.

Speaker Change: Thank you Andrew So if you look at the <unk> score focus we are focused on cyber resilience brief required sport.

Bipul Sinha: Thank you, Andrew. If you look at Rubrik's core focus, we are focused on cyber resilience, which requires both cyber data security posture plus cyber recovery. Because if you wanna assume breach posture, then you need to understand what assets do we have, what is the sensitivity of those assets, that is data, who has access to the data, and who is doing what to the data. If something happens to your data, how do you deliver cyber recovery? We are bringing this data security posture management and cyber recovery to deliver complete cyber resilience. It is a differentiated technology. If you look at the traditional cybersecurity vendors, they have no ability to do cyber recovery.

Speaker Change: <unk> data security portion plus side, what it currently because if you Wanna assumed breach posture, we need to understand what assets do we have what is the sensitivity of do that says that these data who has access to the data and who is doing what could be done and if something happens to your data how do you deliver side vertical. So we are bringing this data.

Speaker Change: Curative portion management and cyber ability to deliver complete cyber resilience and it is a differentiated technology and if you look at the traditional cyber security vendors. They have no ability to do cyber recovery, so they're using the DSP technology as a way to prioritize different.

Bipul Sinha: They are using the DSPM technology as a way to prioritize different threats on the infrastructure, whereas we are focused on cyber recovery, cyber resilience, and that's where we are differentiated. We are seeing strong demand for DSPM. We had a very strong quarter for DSPM, and we are continuing to see great interest in the data security posture management space. As you mentioned, we recently, like, this quarter announced Enterprise Proactive Edition. It is a new offering in the marketplace, and it is early in terms of its customer engagement and discussions. We are seeing, again, a strong demand on the DSPM space.

Speaker Change: On the infrastructure, we had and has been focused on cyber security cyber resilience and thus will be a differentiated we are seeing strong demand for ESPN, we had a very strong quarter for <unk> and we are continuing to see great interest in the in the data security question management cluster management space.

Speaker Change: As you mentioned, we recently like this quarter.

Speaker Change: Announced.

Speaker Change: Enterprise proactive edition at his new offering in the marketplace and it is early in terms of his customer.

Speaker Change: Customer engagement in discussions.

Speaker Change: But we are seeing again strong demand on the DSP in the space.

Speaker Change: Thank you.

Andrew Nowinski: Thank you.

Speaker Change: And we'll take our next question from John <unk> with Guggenheim Securities. Your line is now open.

Operator: We'll take our next question from John DiFucci with Guggenheim Securities. Your line is open.

Speaker Change: Okay.

Speaker Change: Thank you this is Howard MA on for Jonathan.

Howard Ma: Thank you. This is Howard Ma on for John DiFucci. We want to add our congratulations on the strong performance in what is still a challenging selling environment. For either Bipul and or Kiran, when we think about the balance of the year, how would you rank order your growth catalyst across, you know, call it data security driven demand, vendor consolidation on the data protection side? I realize the two may be hard to separate, and also AI driven data growth and the need to secure incremental GenAI workloads. Do you think these catalysts are enough to offset the macro unevenness to use Bipul your words? Thank you.

Howard Ma: To add our congratulations on the strong performance in what is still a challenging selling environment.

Howard Ma: Either people and we're cheering when we think about the balance of the year, how would you rank order your growth catalysts across call. It data security driven demand vendor consolidation on the data protection side and I realize that you may be hard to separate and also AI driven data growth and the need to secure incremental.

Howard Ma: Jenny <unk> workloads and do you think these catalysts are enough to offset the macro unevenness that to use your.

Speaker Change: Your words, thank you.

Speaker Change: Thank you Howard let me give you a little bit of a business perspective, and given can add a little bit of color. So.

Bipul Sinha: Thank you, Howard. Let me give you a little bit of a business perspective, and Kiran can add a little bit of color. If you look at the cyber resiliency space, again, it is rising up to be a top cybersecurity category. In fact, one of our financial services, large financial services customers exec actually told me that Rubrik allowed them to have a record time cyber recovery audit because it is so important in financial services to have services up and running in spite of a cyber attack. If you look at the demand in terms of CISOs focus on cyber resilience, very large global bank CISO told me that cyber resilience is now the core focus because the business service up and running is very, very critical.

Speaker Change: So if you look at the cyber resiliency.

Speaker Change: Again, it is rising up to be a thorn cyber security category in fact.

Speaker Change: One of our finances and with the large financial services customers exact actually told me that the rubric.

Speaker Change: Allowed them to have a record time cyber recovery audit.

Speaker Change: Because it is so important to have services up and running in spite of a cyber attack. If you look at the.

The demand in terms of seafood focus on cyber resilience very large global bank Cisco to meet that cyber resiliency.

Speaker Change: To call focus because the business through service up and running is very very critical so we believe that.

Speaker Change: We have a strong demand strong market with high demand, obviously, new companies immune to macro, but we feel very confident about our outlook.

Bipul Sinha: We believe that we have a strong demand, a strong market with high demand. Obviously, no company is immune to macro, but we feel very confident about our outlook.

Speaker Change: Howard I'll, just add a little bit here from our module drive our perspectives, we try to maintain a balance between new and expansion. We are still very early in the large market 6000, plus customers and market re signed 60000, plus so we try to balance between both the contribution of new and the expansion represented by the NR and also.

Kiran Choudary: Howard, I'll just add a little bit here just from a model driver perspective. You know we try to maintain a balance between new and expansion. We are still very early in the large market, 6,000+ customers in a market we size 60,000+. We try to balance between both the continuation and new and the expansion represented by the NRR. Also I'll add that, you know, we have multiple drivers for expansion. The data within the app could grow. We add more apps to secure and then the security capabilities. What we have seen more recently, 60% of our NRR comes from the data growth and then the rest from security capabilities.

I'll add that we have multiple drivers for expansion the data within the App could grow we add more apps to secure and then the security capabilities and what we have seen more recently, 60% of our MLR comes from data growth and then the rest from our security capabilities, but one other driver I'd wrap up here is large deals.

Kiran Choudary: One other driver I'd wrap up here is large deals influence the numbers in a quarter, and the timing of those can vary between quarter to quarter. I'll just say that that's the other driver.

Speaker Change: UMC.

Speaker Change: The numbers in a quarter and timing of those up and.

Speaker Change: Can vary between quarter to quarter. So I'll, just say that that is the other driver.

Great. Thanks, so much.

Howard Ma: Great. Thanks so much.

Speaker Change: We'll move next to Gregg Moskowitz with Mizuho. Your line is now open.

Operator: Move next to Gregg Moskowitz with Mizuho. Your line is open.

Gregg Moskowitz: Okay. Thank you very much and I'll add my congrats congratulations obviously these are a strong set of results, but what are maybe most impressed by is that your net new subscription <unk> actually grew over 20% sequentially and this is compared to your seasonally strongest quarter I know that you benefited from larger transactions you called that out a couple of times.

Gregg Moskowitz: Okay. Thank you very much, and I'll add my congratulations. Obviously these are a strong set of results, but what I'm maybe most impressed by is that your net new subscription ARR actually grew over 20% sequentially, and this is compared to your second strongest quarter. I know that you benefited from larger transactions. You called that out a couple times. Possibly you can provide a little bit more context around that. But even so, just wondering if there's anything else that you would expand on in terms of how you saw so much strength in a fiscal Q1, and again, in the current macro environment, no less.

Gregg Moskowitz: Lastly, you can provide a little bit more context around that but EBIT. So just wondering if there's anything else that you would.

Speaker Change: And on in terms of how you saw so much strength in our fiscal Q1 and again in the current macro environment.

Thanks, Greg.

Speaker Change: Proud of our execution.

Bipul Sinha: Thanks, Greg. We are proud of our execution, this past quarter. Obviously, 46% growth to $856 million in ARR are the strong results. We are experiencing a very secular demand in the marketplace. The cyber resilience thesis and cyber resilience focus continues to be strong because again, as I said before, there has been a lot of investment in the cyber prevention, not enough focus on cyber resilience. We have a differentiated technology. We built our technology platform, 10 years ago as a differentiated platform that combines data security, posture management, and cyber recovery in a zero trust architecture that natively delivers cyber resilience. This is a large brownfield opportunity because, again, the legacy platforms have no cyber resilience capability.

Speaker Change: Post quarter end.

Speaker Change: And obviously, 46% growth to return in two 6 million and add on.

Speaker Change: The strong results, we are experiencing a very secular demand in the marketplace the cyber resilience.

Speaker Change: Our resilience focus continues to be strong because again as I said before there has been a lot of investment in the cyber prevention not enough focus on cyber resilience and we have a differentiated technology. We built our technology platform 10 years ago as a differentiated platform that combines data security.

Speaker Change: Churn management and cyber recovery in the Zero Trust architecture that natively delivers cyber resilience.

Speaker Change: And this is a large brownfield opportunity because.

This is the game.

Speaker Change: The legacy platforms have new cyber resilience capability. If you look at our win rate we are winning vast majority of these against.

Bipul Sinha: If you look at our win rate, we are winning vast majority of deals against legacy as well as newer vendor in our space. If you look at the customers and their focus, they are focused on ensuring that their businesses are up and running. I'll give you an example. We released our Ruby product to help productivity of IT and security operations team. Fortune 500 insurance company told me that they are using Ruby to do threat hunting, and monitoring, and delivering productivity enhancements through cybersecurity workflows. The focus on cybersecurity, focus on cyber resiliency, delivering the ease of use on a differentiated platform, on a secular demand in a large market, are all contributing to our success.

Legacy as well as the one vendor in this space.

Speaker Change: And.

Speaker Change: And if you look at the <unk>.

Speaker Change: Customers in beautiful because they are focused on ensuring that these businesses are up and running and give you. An example.

We released our <unk> product to help productivity of it.

Speaker Change: And security operations team.

Speaker Change: 500 insurance company told me that they are using <unk> to do certain hunting and monitoring.

Speaker Change: And delivering productivity enhancements through cyber security workflows. So the focus on cyber security focus on cyber resiliency delivering the ease of use on a differentiated platform on a secular demand in large market on all contributing to our success.

Hey, Greg This is Kevin I'll, just add a little bit more color on the net for the quarter, we got off to a strong start and as you know strong start from a linearity perspective helps us drive the NII throughout the quarter, our net new <unk> and the second aspect, which we shared earlier as we did have favorable benefit from large transactions and the timing of it.

Kiran Choudary: Hey, Gregg, this is Kiran. I'll just add a little bit more color on the net new ARR for the quarter. We got off to a strong start. As you know, a strong start from linearity perspective helps us drive the ARR throughout the quarter or net new ARR. The second aspect, which we shared earlier, is we did have favorable benefit from large transactions and the timing of which can vary quarter to quarter. It's favorable this quarter. Just to give you one data point, we had two times more ARR from million-dollar-plus transactions this quarter, Q1 versus Q1 of fiscal 2024. We had a specific example of a very large healthcare insurance customer who standardized on our cyber resilience platform as well. A couple of things to add.

Speaker Change: Can vary quarter to quarter, so less favorable this quarter just to give you one data point, we had two times more.

Speaker Change: There are $4 million plus transactions this quarter Q1 versus Q1 fiscal 2000, and then we.

Speaker Change: Especially example, a very large health care insurance customer, who standardized on our cyber resiliency platform as well so couple of things to add.

Super helpful. Guys. One quick follow up if I may it doesn't get mentioned often.

Gregg Moskowitz: Super helpful, guys. One quick follow-up, if I may. It doesn't get mentioned often, but Bipul, I was curious if cyber insurance is playing a role as well when it comes to how customers are approaching data security.

Speaker Change: I was curious if cyber insurance is playing a role as well when it comes to how customers are approaching data security.

Speaker Change: I will definitely.

Speaker Change: Has an impact because if you look at the landscape of cyber incidents. Many companies have seen the silo incident premium grew up other companies in the market.

Bipul Sinha: Cyber insurance is definitely has an impact because if you look at the landscape of cyber insurance, many companies have seen their cyber insurance premium go up. Other companies are not getting cyber insurance altogether. Because for a cyber insurance underwriter, every company says that they have the best technology, best team, and best practices. How do they differentiate? That's where a strong cyber resilience platform that allows businesses to be up and running even in spite of a cyber attack or breaches is important. Just to point out, in fact, Rubrik has announced a partnership with Aon for joint go-to-market because their customer base has the same cyber resilience issue.

Speaker Change: Heather.

Speaker Change: For our cyber incidents underwriter every company says that they have the best technology based team and best practices. So the holding the difference here and Thats with a strong cyber resilient platform that allows businesses to be up and running.

Speaker Change: Even in spite of a cyber attack on breaches is important just to point out in fact, <unk> has announced a partnership with E. On for joint go to market because the air customer base has the same on our side what is the new tissue.

Terrific. Thank you.

Speaker Change: Okay.

Eric Heath: Terrific. Thank you.

Gregg Moskowitz: Terrific. Thank you.

Speaker Change: Next to Joel Fishbein with true Securities. Your line is open.

Operator: We'll move next to Joel Fishbein with Truist Securities. Your line is open.

Joel Fishbein: Congrats on the excellent execution I have two follow up questions to the last question is Greg's question number one can you just.

Joel Fishbein: Congrats on the excellent execution. I have two follow-up questions to the last questions, Greg's question. Number one, Bipul, can you just talk a little bit more about Ruby AI? You talked about the one customer, but overall demand for Ruby AI, I'm just curious. I know it's early days, but would love to get clarification there. Kiran, for you, just in terms of large deal, can you just remind us of what the large deal pipeline looks like going forward? That would be helpful. Thank you so much.

Joel Fishbein: Talk a little bit more about <unk>, you talked about the one customer, but overall demand for <unk> I'm. Just curious I know, it's early days, but would love to get clarification, there and Kevin for you just in terms of large deal can you just remind us of what the large deal pipeline looks like going forward.

Speaker Change: That would be helpful. Thank you so much.

Speaker Change: Thanks, Joe.

Speaker Change: Let me first answer the Ruby question and then Kevin can provide some color on the the other question. So as you might recall.

Bipul Sinha: Thanks, Joel. Let me first answer the Ruby question, and then Kiran can provide some color on the other question. As you might recall, Ruby is the GenAI agent for Rubrik Security Cloud, and it is focused on productivity for IT and security operations team. As you know, cyber resilience operations is largely falling on the IT department, and they have not a whole lot of training and focus on cyber or cyber resilience or cyber recovery, and they have been asked to do this cyber recovery work. We built Ruby to help them do the cyber work without being an expert in cyber. In fact, our design goal is that if you can use Facebook, you should be able to do cyber recovery. That's what Ruby is focused on.

Speaker Change: We use the agenda agent <unk> security cloud and it is focused on activity for IP and security operations team as you know.

Speaker Change: Cyber resilience operations is largely falling into the it departments and did have.

Speaker Change: Not a whole lot of training and focus on on cyber cyber resilience and cyber recovery and they have been asked to do this I will recovery book. So we had we built <unk> two <unk>.

Speaker Change: Without being an explosion inside where in fact, our design goal is that if you can use Facebook used to be able to do cyber acutely. So thats. What <unk> is focused on is the is a multi year project for US we are adding a lot of the skill sets to be to ensure that.

Bipul Sinha: It's a multi-year project for us. We are adding a lot of skill sets to Ruby AI to ensure that all the activities that somebody could perform on Rubrik Security Cloud can be done in natural language with ease of use and handholding to be able to complete the task. It is as if we are shipping a person along with our product who handholds our customers to a tremendous outcome. It's a long-term project for us. It is definitely seeing a usage in our customer base, and we believe that it'll be a driver for more usage and adoption of our Enterprise Edition.

Speaker Change: That all the activities that can recruit pro form on <unk> security cloud can be done in natural language with ease of use and hand holding to be able to.

Speaker Change: To complete the task. It is as if we are shipping a person along with our product two handfuls of customers to a tremendous outcomes.

It's a long term project for us it is definitely seeing usage in our customer base and we believe that will be moved forward.

Speaker Change: For a more usage and adoption upon enterprise edition.

Speaker Change: And John just on the second part of your question sure.

Kiran Choudary: Joel, just on the second part of your question, as Bipul shared, we have multiple drivers on the basis of which we are becoming more strategic with the very large customers. It's a combination of both land and expand, in terms of the size of the transactions occurring. The ASPs are increasing quarter over quarter. Also a result of the going into more larger transactions is we added 15 customers to our million-dollar-plus count this quarter, from 99 to 114 this quarter. I will say that it varies from timing to timing, quarter to quarter on these large transactions. The contribution of large transactions to our pipeline is increasing.

Speaker Change: Sure we have multiple drivers on the basis of which we are becoming more strategic with the very large customers.

Speaker Change: That's a combination of both land and expand in terms of the size of the transactions are occurring.

Speaker Change: Asps increasing quarter over quarter and also.

Speaker Change: The result of the growing into more larger transactions as we added 15.

Speaker Change: Customers, who are million dollar plus comp this quarter from 99 to 140 in this quarter, but I will say that it varies from timing of panic.

The quarter on these large transactions, but the.

Speaker Change: The contribution of large transactions through our pipeline is increasing.

Speaker Change: Great. Thank you so much.

Joel Fishbein: Great. Thank you so much.

All lines next to Brad Zelnick with Deutsche Bank. Your line is open.

Operator: We'll move next to Brad Zelnick with Deutsche Bank. Your line is open.

Brad Zelnick: Great. Thanks, so much and congrats guys on a really strong entre.

Brad Zelnick: Great. Thanks so much, and congrats guys on a really strong entry, you know, strong first quarter out of the gate. My question for you, Bipul, at Forward last week, you talked about adding capabilities to the product that help better prioritize operational recovery of the most important data first to further enhance RTO for customers. We often hear a lot about Rubrik's strengths on the security side of data resiliency, but maybe could you touch on speed of recovery and how important a factor that is for customers evaluating the product and how Rubrik stacks up against the competition? Thanks.

Brad Zelnick: First quarter out of the gate.

Brad Zelnick: My question for you before with forward last week, you talked about adding capabilities to the product that help better prioritize operational recovery of the most important data first to further enhance our tia for customers and we often hear a lot about rubric strengths on the security side of data resiliency, but maybe.

Brad Zelnick: Could you touch on on speed of recovery and how important factor that is for customers evaluating the product and how rubric stacks up against the competition. Thanks.

Brad Zelnick: Okay.

Thank you Brad.

If you look at the Rubik's coolest trend is in cyber resilience and cyber recovery because backup is like an old 30 year old technology.

Bipul Sinha: Thank you, Brad. If you look at Rubrik's core strength is in cyber resilience and cyber recovery, because backup is like an old thirty-year-old technology. But recovery, particularly cyber recovery, is where Rubrik shines. Because to be able to deliver cyber recovery, folks need to understand what is a clean data. Because if you have thousands and thousands of applications, and if you have been attacked, how do you know which is a cleaner state of the data? How far attack has gone? Do you have sensitive data that is in the scope of the attack so that you have dark web issue or data exfiltration issue? Do you have malware sitting in the data? Because if you recover malware, you get reinfected, and you have Groundhog Day. Delivering cyber recovery requires like, fundamentally new architecture, and that's what Rubrik did.

Brad Zelnick: Currently, particularly type of recovery is where <unk> shines because to be able to deliver cyber recovery folks need to understand.

Brad Zelnick: What is a clean data because if you have thousands and thousands of applications. If you had been attacked how do you view. This as a clean is state of the data how far back has gone do you have sensitive data that is in the scope of the attack. So that you have not only the issue.

Brad Zelnick: Our big exploration issue.

Brad Zelnick: Do you have non we're sitting in the data because if you recover malware you get Reinfected and you have ground Hog day, so delivering cyber recovery requires like fundamentally new architecture and Thats. What we did we built a new software by combining backup and recovery and cyber security principles into a single platform to natively delivered.

Bipul Sinha: We built a new software by combining backup and recovery and cybersecurity principles into a single platform to natively deliver data security, patch, and management, as well as cyber recovery in a single platform. That's what makes the difference for our customers. This is a mission-critical thing for our customers. We are helping our customers recover from cyberattacks such as ransomware, and they are sleeping easy because they have Rubrik.

Brad Zelnick: Data security battery management as well as cyber recovery in a single platform and Thats, what makes the difference from our customers.

Brad Zelnick: Again. This is mission critical for our customers, we are helping our customers recover from cyber attacks, such as ransomware and they're sleeping easy because they had rubric.

Brad Zelnick: Yes.

Brad Zelnick: Okay.

Speaker Change: Excellent. Thank you.

Brad Zelnick: Okay.

Brad Zelnick: Excellent. Thank you.

Well move next to Eric <unk> with Keybanc.

Operator: We'll move next to Eric Heath with KeyBanc. Your line is open.

Brad Zelnick: Your line is open.

Eric: Great. Thanks for taking the question I guess Triple I'd love to hear more your perspective on what you see from customers as they move their core workloads to the cloud just curious to hear more on how their spend and coverage of their environment change when they do make that move to the cloud of their applications and infrastructure.

Eric Heath: Great. Thanks for taking the question. I guess, Bipul, I'd love to hear more your perspective on what you see from customers as they move their core workloads and their IT estate to the cloud. Just curious to hear more on how their spend and coverage of their environment change when they do make that move to the cloud of their applications and infrastructure.

Speaker Change: Thank you Eric.

Speaker Change: Rubric took the approach from day, one while building the cloud Native security cloud is that our technology and our solution is detailed mutation independent and we sell transportable license. So essentially it doesn't matter whether the businesses run their applications on premises and the applications in.

Bipul Sinha: Thank you, Eric. Rubrik took the approach from day one while building the cloud native Rubrik Security Cloud, is that our technology and our solution is data location independent, and we sell transportable license. Essentially, it doesn't matter whether the businesses run their applications on premises, run their applications in the cloud or use SaaS. We have a uniform solution, uniform way to consume Rubrik, and that's what we operate on. As we see more movement towards cloud and SaaS, it is leading to more data fragmentation and application fragmentation. When you have more application and data fragmentation, which means that you have more bigger surface area of attack, which means that businesses need more data security, more ability to deliver cyber resilience, more ability to get bounced back up and running, when the inevitable cyber attack happens.

Speaker Change: The cloud use SaaS, we have a uniform solution uniform way to consume new rig and Thats, what we operate on so as we see more movement towards cloud and SaaS. It is leading to more data fragmentation and application fragmentation. When you have more application and data fragmentation, which means that you have.

Speaker Change: Below the surface area of attack, which means that businesses need more details are going to be more ability to deliver cyber resilience more ability to bounce back up and running when the inevitable cyber attack happens. So we believe that we will continue to see secular demand for our product as businesses continue their digital transformation journey.

Bipul Sinha: We believe that we'll continue to see secular demand for our product as businesses continue their digital transformation and cloud journey.

Speaker Change: Okay.

Speaker Change: Well move next to <unk> <unk> with Cantor Fitzgerald Your line is open.

Operator: We'll move next to Yifu Li with Cantor Fitzgerald. Your line is open.

Speaker Change: Congrats on your inaugural earning an IPO. Thank you for taking my question.

Yifu Li: Congrats on your inaugural earnings and IPO. Thank you for taking my question. Question for Bipul or Kiran is related to the public sector vertical. I understand Rubrik's achieved a StateRAMP certification, SLED certification earlier this year. Was wondering if you could give me some feedback on Rubrik Security Cloud government threat hunting module as well as other public sector vertical.

Yi Fu Lee: Congrats on your inaugural earnings and IPO. Thank you for taking my question. Question for Bipul or Kiran is related to the public sector vertical. I understand Rubrik's achieved a StateRAMP certification, SLED certification earlier this year. Was wondering if you could give me some feedback on Rubrik Security Cloud government threat hunting module as well as other public sector vertical.

Speaker Change: For a bit or Karen.

Speaker Change: It's related to the public sector vertical I understand rubik's achieved.

Speaker Change: Achieved a state ramp certification slash certification earlier this year I was wondering if you could give me some feedback on rubik's could your cloud government threat hunting.

Speaker Change: Module as well as other public sector vertical.

Speaker Change: Okay.

Speaker Change: Thank you so let me start with this.

Bipul Sinha: Thank you, Yifu. Let me start with this. As you stated, we got FedRAMP, StateRAMP certification. Our SLED business, which is a state and local business, continues to be strong. We are still going through the FedRAMP certification process, and we believe that would be an unlock for us in federal market. As you can imagine, the federal government data is critical, and they have a huge risk from nation-state actors and cybersecurity in general. We believe that the cyber recovery, cyber resilience focus at Rubrik will find high resonance with federal customers. We are awaiting the FedRAMP before we kind of scale our Fed business.

Speaker Change: So as you stated we got.

Speaker Change: Fed ramp.

Speaker Change: State ramps or solid state Rems certification and our sled business within the state and local business continues to be to be strong we're still going through the fed ramp certification process and we believe that there could be a new launch for the federal market.

Speaker Change: As you can imagine the federal government data is critical and we have.

Speaker Change: It's a risk from NUCYNTA state actors in cybersecurity in general So we believe that this recovery.

Speaker Change: Recovery cyber resilience focus that Google will find hydrous womens with federal customer.

Speaker Change: The program before we kind of scale of the business.

Speaker Change: Okay.

Speaker Change: Thank you.

Speaker Change: Okay.

Yifu Li: Thank you.

Yi Fu Lee: Thank you.

Speaker Change: We'll move next to Todd Copeland with CIBC. Your line is now open.

Operator: We'll move next to Todd Coupland with CIBC. Your line is open.

Speaker Change: Okay.

Speaker Change: Good afternoon. Thanks for taking my question I wanted to ask about market share as well youre, clearly growing faster than market and faster than public legacy peers can you just talk about.

Speaker 14: Oh, good afternoon. Thanks for taking my question. I wanted to ask about market share as well. You're clearly growing faster than market and faster than public legacy peers. Can you just talk about where most of your market share has been coming, I guess, in this last quarter and over the last couple of quarters? Thank you.

Todd Coupland: Oh, good afternoon. Thanks for taking my question. I wanted to ask about market share as well. You're clearly growing faster than market and faster than public legacy peers. Can you just talk about where most of your market share has been coming, I guess, in this last quarter and over the last couple of quarters? Thank you.

Speaker Change: Where most of your market share has been coming I guess in this last quarter and over the last couple of quarters. Thank you.

Speaker Change: Thank you Todd rubric is an equal opportunity share taker as you can imagine we will differentiate between legacy competition or newer.

Bipul Sinha: Thank you, Todd. Rubrik is an equal opportunity share taker. As you can imagine, we don't differentiate between legacy competition or newer vendor in our space. Because of our differentiated solution, because of our unique platform with architectural difference, there is a significant opportunity for us in the marketplace because what we do is pretty unique, and our customers have gone through vicious ransomware and other cyber attacks, and we have recovered them. It's a market proven solution. We are helping our customers, again, have peace of mind. Our win rate against our legacy as well as newer vendor competition is very, very high. We are winning vast majority of the deals against them.

Vendor in our space because of our differentiated solution because of our unique platform. It architecture.

Speaker Change: The difference there is a significant opportunity for us in the marketplace, because what we do is pretty unique and our customers.

Speaker Change: We have gone through.

Speaker Change: This year's ransom of another sigler died suddenly have recovered them.

Speaker Change: So it's a market proven solutions.

Speaker Change: And we are helping our customers again have peace of mind.

Speaker Change: So our win rate against our.

Speaker Change: Legacy as well as newer vendor competition is very very high we are winning vast majority of the difference there.

Yeah.

Speaker Change: And as the consolidation amongst one of your main competitors does that does that.

Speaker 14: As the consolidation amongst one of your main competitors, does that change your win rate at all? Is that an opportunity for you? Just talk about that. Thanks a lot.

Todd Coupland: As the consolidation amongst one of your main competitors, does that change your win rate at all? Is that an opportunity for you? Just talk about that. Thanks a lot.

Speaker Change: Change your win rate at all.

Speaker Change: An opportunity for you just talk about that thanks a lot.

Speaker Change: Okay.

Speaker Change: Obviously the margin.

Bipul Sinha: Obviously, the merger, the news, I wish both parties on the merger luck. If the history is any benchmark, there has not been a lot of success by merging a growth company with a legacy platform to create a new company. I like our chances. If you look at our product offering, our momentum in the marketplace, our differentiated solution, and the way we are delivering cyber resilience, actually, we are seeing interest and demand from legacy vendors because they feel that their roadmap is in danger. There's a general confusion around the mergers. Overall, we believe that it's positive news for us.

Speaker Change: The news I wish.

Speaker Change: Both parties on the merger of luck.

Speaker Change: But if history is any any benchmark.

Speaker Change: There has not been a lot of success by by merging a growth company with a with a legacy platform to create a new company.

Speaker Change: And I like our chances.

Speaker Change: You look at our product offering and our momentum in the marketplace, our differentiated solution and the way we are delivering cyber resilience is actually.

Let's see interest and demand from legacy vendor because the feedback.

Speaker Change: The roadmap is in danger is a general confusion around the mergers. So overall, we believe the positive news for us.

Speaker Change: Okay.

Thank you very much.

Speaker Change: Yes.

Speaker 14: Thank you very much.

Todd Coupland: Thank you very much.

Speaker Change: And we will take our last question from Taz <unk> with Wedbush Securities. Your line is open.

Operator: We'll take our last question from Taz Koujalgi with Wedbush Securities. Your line is open.

Hey, guys. Thanks for taking my question two questions system for people, but can you talk about your partner ecosystem. It's that's strictly the partnership with <unk>, what does that bring to the table is that focused on lots of somewhat mid market.

Speaker 15: Hey, guys. Thanks for taking my question. Two questions. First one for Bipul. Bipul, can you talk about your partner ecosystem and specifically the partnership with Kyndryl? What does that bring to the table? Is that focused on large customers, mid-market? How does that change your competitive positioning? Is that really unique in terms of offering this managed service through Kyndryl or are there other companies, your other competitors who offer something similar as a managed service?

Taz Koujalgi: Hey, guys. Thanks for taking my question. Two questions. First one for Bipul. Bipul, can you talk about your partner ecosystem and specifically the partnership with Kyndryl? What does that bring to the table? Is that focused on large customers, mid-market? How does that change your competitive positioning? Is that really unique in terms of offering this managed service through Kyndryl or are there other companies, your other competitors who offer something similar as a managed service?

Speaker Change: And how does that change your competitive positioning is that really unique in terms of offering. This managed service through Congress or other other companies or other competitors were doing something similar as a managed service.

Speaker Change: Yes.

Speaker Change: Thank you.

Speaker Change: If you look at our Kingdom partnership this partnership is focused on helping our customers.

Bipul Sinha: Thank you, Taz. If you look at our Kyndryl partnership, this partnership is focused on helping our customers get cyber resilient. Kyndryl has a very significant cyber resiliency practice, and they go to market with Rubrik for cyber resiliency. This Kyndryl obviously has a lot of focus into the upper end of the market, and we are helping large organizations around the world.

Speaker Change: Cyber resilient and can do has a very significant cyber resiliency practice and.

Speaker Change: Go to market with <unk> plus <unk>.

Speaker Change: UC.

Speaker Change: This scandal, obviously has a lot of focus into the upper end of the market and we are helping our large organizations around the world.

Speaker Change: Good cyber resilient delivered managed service took into you have a great partnership with them.

Kiran Choudary: Get cyber resilient, deliver managed service through Kyndryl. We have a great partnership with them.

Bipul Sinha: Get cyber resilient, deliver managed service through Kyndryl. We have a great partnership with them.

Speaker Change: Got it and one follow up for Karen term very strong results in the quarter strong in our art. If you can just comment on.

Speaker 15: Got it. One follow-up for Kiran. Kiran, very strong results in the quarter, strong NRR. Can you just comment on, within the new ARR in this quarter, how is the mix between, I guess, new logos and upsell, and then going forward in terms of the guide, like what is implied for NRR in the guide? How do you expect the NRR to trend going forward for the rest of the year?

Taz Koujalgi: Got it. One follow-up for Kiran. Kiran, very strong results in the quarter, strong NRR. Can you just comment on, within the new ARR in this quarter, how is the mix between, I guess, new logos and upsell, and then going forward in terms of the guide, like what is implied for NRR in the guide? How do you expect the NRR to trend going forward for the rest of the year?

Speaker Change: Within the new <unk> in the quarter, how is the mix between new logos and upsell and then going forward in terms of the guide like what is what is implied for an IRR in the guidance I would expect in our auto trends going forward for the rest of the year.

Speaker Change: Sure. So let me start off with just broadly, stating that our model supports a high NRI Jessica.

Kiran Choudary: Hi, Taz. Sure. So let me start out with just broadly stating that our model supports a high NRR, just given the breadth of offering and the customer landing we bring. Historically, it's benefited from the maintenance to subscription transformation, just like ARR benefited as well, but it lags a little bit. If you look at it over time, you'll see a gradual decline there without the impact of the transition. The large lands we make also impact ARR and over time, as the business scales, the NRR will naturally come down. We generally target, as I said in the earlier question, roughly equal from the land part of the business, which is new customers, as well as expansion on a multi-quarter basis.

Speaker Change: Just given the breadth of offering and the customer lending rebranding.

Historically, it's benefited from the maintenance to subscription.

Speaker Change: Transformation just like <unk>.

Speaker Change: Benefited as well about lags a little bit.

Speaker Change: If you look at it over time, you'll see a gradual decline there without the impact of the transition.

Speaker Change: The large lands, we make also impact IRR and or scale or over time as the business scales.

Speaker Change: Naturally come down, but we generally target.

Speaker Change: Set of earlier question roughly equal from the land part of the business, which is new customers as well as expansion on a multi quarter basis.

Speaker Change: The last thing I'll say is just if you look at the components of IRR.

Kiran Choudary: The last thing I'll say is just if you look at the components of NRR, the data growth component, which is bringing new products under the Rubrik umbrella for security, as well as the security capabilities, the applications we sell on top of data platform, it's about 60/40, 60% data growth, and 40% security capabilities.

Speaker Change: Data growth component, which is bringing new products under the rubric umbrella for security as well as the security capabilities. The applications, we sell on top of our platform. It's about 60 40, 60% data growth.

Speaker Change: 40% security capabilities.

Speaker Change: Thank you.

Speaker Change: Yeah.

Speaker 15: Thank you.

Taz Koujalgi: Thank you.

Speaker Change: I would now like to turn it back to <unk> CEO for any closing remarks.

Operator: I would now like to turn it back to Bipul Sinha, CEO, for any closing remarks.

Speaker Change: Yeah.

Speaker Change: Okay.

Speaker Change: First of all I want to thank everybody on this call as well as our investors have in the world for their support and sponsor stapled rubric.

Kiran Choudary: First of all, I want to thank everybody on this call, as well as our investors around the world for their support and sponsorship of Rubrik. Us becoming a public company completes the first chapter of Rubrik, and now we are in the second chapter of the company and the second decade of Rubrik, and we are looking forward to partnering with all of you, everybody in the ecosystem, to build an enduring business. We are dedicated to it. Thank you so much for your support, and we hope to generate good returns for all of you guys.

Bipul Sinha: First of all, I want to thank everybody on this call, as well as our investors around the world for their support and sponsorship of Rubrik. Us becoming a public company completes the first chapter of Rubrik, and now we are in the second chapter of the company and the second decade of Rubrik, and we are looking forward to partnering with all of you, everybody in the ecosystem, to build an enduring business. We are dedicated to it. Thank you so much for your support, and we hope to generate good returns for all of you guys.

Speaker Change: US becoming a public company completes the first chapter of rubric and now we are in the second chapter of the company in the second decade of rubric and we're looking forward to partnering with all of you and everybody in the ecosystem to build an enduring business. We are dedicated to it. Thank you. So much for your support and we hope to generate good returns for all of you.

Guys.

Speaker Change: Okay.

Speaker Change: This does conclude today's program. Thank you for your participation you may disconnect at any time and have a wonderful evening.

Operator: This does conclude today's program. Thank you for your participation. You may disconnect at any time, and have a wonderful evening.

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